[Federal Register Volume 69, Number 143 (Tuesday, July 27, 2004)]
[Rules and Regulations]
[Pages 44575-44576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17042]



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 Rules and Regulations
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  Federal Register / Vol. 69, No. 143 / Tuesday, July 27, 2004 / Rules 
and Regulations  

[[Page 44575]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB90


Common Crop Insurance Regulations; Processing Tomato Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
amendments to the Processing Tomato Crop Insurance Provisions. The 
intended effects of this action are to clarify that producers who have 
production contracts with tomato brokers are eligible for insurance, 
allow the Special Provisions statements to provide a replant payment 
amount that more adequately reflects the regional cost of tomatoes, and 
restrict the effect of the current Processing Tomato Crop Provisions to 
the 2004 and prior crop years.

DATES: This rule is effective August 26, 2004.

FOR FURTHER INFORMATION CONTACT: John McDonald, Risk Management 
Specialist, Research and Development, Product Development Division, 
Risk Management Agency, United States Department of Agriculture, 6501 
Beacon Drive, Stop 0812, Room 426 Kansas City, MO, 64133-4676, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be Not-Significant for the 
purposes of Executive Order 12866 and, therefore, it has not been 
reviewed by the Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 
35), the collections of information in this rule have been approved by 
OMB under control number 0563-0053 through February 28, 2005.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal governments or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees, and compute 
premium amounts, or a notice of loss and production information to 
determine an indemnity payment in the event of an insured cause of crop 
loss. Whether a producer has 10 acres or 1000 acres, there is no 
difference in the kind of information collected. To ensure crop 
insurance is available to small entities, the Federal Crop Insurance 
Act authorizes FCIC to waive collection of administrative fees from 
limited resource farmers. FCIC believes this waiver helps to ensure 
small entities are given the same opportunities to manage their risks 
through the use of crop insurance. A Regulatory Flexibility Analysis 
has not been prepared since this regulation does not have an impact on 
small entities, and, therefore, this regulation is exempt from the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988 on civil justice reform. The provisions of this rule will not 
have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
under the terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part ll and 7 CFR part 400, subpart J for 
the informal administrative review process of good farming practices, 
as applicable, must be exhausted before any action against FCIC for 
judicial review may be brought. The administrative appeal provisions 
published at 7 CFR part 11 must be exhausted before any action against 
FCIC for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    On November 14, 2003, FCIC published a notice of proposed 
rulemaking in the Federal Register at 68 FR 64570-64571 to revise 7 CFR 
457.160, Processing Tomato Crop Insurance. Following publication of the

[[Page 44576]]

proposed rule the public was afforded 60 days to submit written 
comments and opinions. A total of fifteen comments were received from 
an insurance service organization. Twelve of the comments received were 
minor editorial changes and were not considered a part of the proposed 
rule. However, FCIC will consider the comments when the rule is re-
opened. The remaining three comments received and responses are as 
follows:
    Comment. An insurance service organization stated that the phrase 
``selling and buying'' in the new ``broker'' definition should be 
changed to ``buying and selling'' to reflect the usual sequence of 
events and the normal use of the phrase.
    Response. FCIC agrees with the insurance service organization and 
has revised the provisions accordingly.
    Comment. An insurance service organization stated that FCIC should 
consider deleting the ``good farming practices'' definition from the 
processing tomato crop provisions so it would not supersede the 
definition in the Basic Provisions.
    Response. FCIC does not agree with the insurance servicing 
organization that the definition for ``good farming practice'' should 
be deleted from the processing tomato crop provisions. The current 
definition states that good farming practices also include the cultural 
practices contained in the tomato processing contract. However, FCIC 
revised the definition to eliminate any conflict with the Basic 
Provisions.
    Comment. An insurance service organization questioned whether it's 
FCIC's intent that paragraph 12(b)(1) allow a regional maximum 
replanting payment to be the amount shown in the Special Provisions. As 
written, the regional maximum amount would not be limited by the 
insured share unless such a limit is included in the Special Provisions 
statement.
    Response. It is FCIC's intent to allow a regional maximum amount of 
replanting payment and it will be limited by the insured share. FCIC 
agrees with the commenter and will revise section 12(b)(1) accordingly 
to add insured share.

List of Subjects in 7 CFR Part 457

    Crop insurance, Tomato reporting and recordkeeping requirements.

Final Rule

0
Accordingly, as set forth in the preamble, the Federal Crop Insurance 
Corporation amends 7 CFR part 457 for the 2005 and succeeding crop 
years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for 7 CFR part 457 continues to read as 
follows:

    Authority: 7 U.S.C. 1506(l) and 1506(p).


0
2. Amend the crop insurance provisions in Sec.  457.160 as follows:
0
a. Revise the introductory text;
0
b. Amend section 1 of the crop provisions by adding a definition for 
``Broker'' in alphabetical order and revising the definitions of ``good 
farming practices'' and ``processor contract'';
0
c. Revise section 8(c); and
0
d. Revise section 12(b).


Sec.  457.160  Processing tomato crop insurance provisions.

    The Processing Tomato Crop Insurance Provisions for the 2005 and 
succeeding crop years are as follows:
* * * * *
    1. Definitions
* * * * *
    Broker. An enterprise in the business of buying and selling 
tomatoes possessing all the licenses and permits required by the state 
in which it operates, and that has a written contract with a processor 
to purchase processing tomatoes on behalf of the processor and to 
deliver such tomatoes to the processor.
* * * * *
    Good Farming Practices. In addition to the definition of ``good 
farming practices'' contained in section 1 of the Basic Provisions, 
good farming practices include the cultural practices required under 
the processor contract.
* * * * *
    Processor Contract. A written agreement between the producer and a 
processor, or between the producer and a broker, containing at a 
minimum:
    (a) The producer's commitment to plant and grow processing 
tomatoes, and to deliver the tomato production to the processor or 
broker;
    (b) The processor's, or broker's, commitment to purchase all the 
production stated in the processor contract; and
    (c) A price per ton that will be paid for the production.
* * * * *
    8. Insured Crop
* * * * *
    (c) A tomato producer who is also a processor or broker may 
establish an insurable interest if the following requirements are met:
    (1) The processor or broker, as applicable, must comply with these 
Crop Provisions;
    (2) Prior to the sales closing date, the Board of Directors or 
officers of the processor or the broker must execute and adopt a 
resolution that contains the same terms as an acceptable processor 
contract. (Such resolution will be considered a processor contract 
under this policy); and
    (3) As applicable, our inspection reveals that the processing 
facilities comply with the definition of a processor contained in these 
Crop Provisions.
* * * * *
    12. Replanting Payment
* * * * *
    (b) The maximum amount of the replanting payment per acre will be 
determined as follows:
    (1) The amount shown on the Special Provisions multiplied by your 
share; or
    (2) If an amount is not contained in the Special Provisions, the 
lesser of 20 percent of the production guarantee or three tons, 
multiplied by your third stage (final) price election, multiplied by 
your share; and
    (3) In no event will the replanting payment per acre exceed your 
actual cost of replanting.
* * * * *

    Signed in Washington, DC, on July 22, 2004.
Ross J. Davidson, Jr.,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 04-17042 Filed 7-26-04; 8:45 am]
BILLING CODE 3410-08-P